FUEL

From the slime emerges 'green crude'

Sapphire Energy says its product from algae makes a low-polluting gasoline and diesel.

A San Diego company said Wednesday that it could turn algae into oil, producing a green-colored crude yielding ultra-clean versions of gasoline and diesel without the downsides of biofuel production.

The year-old company, called Sapphire Energy, uses algae, sunlight, carbon dioxide and non-potable water to make "green crude" that it contends is chemically equivalent to the light, sweet crude oil that has been fetching more than $130 a barrel in New York futures trading.

Chief Executive Jason Pyle said that the company's green crude could be processed in existing oil refineries and that the resulting fuels could power existing cars and trucks just as today's more polluting versions of gasoline and diesel do.

"What we're talking about is something that is radically different," Pyle said. "We really look at this as a paradigm change."

Sapphire's announcement is the latest development from companies and researchers focused on finding ways to cut harmful emissions from the nation's giant fleet of cars, trucks, trains and planes.

Sapphire's process would help curb the nation's reliance on imported crude and alleviate concerns about the world's dwindling supply of oil, Pyle said. And by using carbon dioxide spewed out by such things as coal plants, the production process would help remove harmful emissions from the atmosphere.

The green crude also would produce fewer pollutants in the refining process and fewer harmful emissions from vehicle tailpipes, Pyle said.

The company wouldn't give details about the production process or where its pilot project would be located. It expects to introduce its first fuels in three years and reach full commercial scale in five years.

Pyle wouldn't cite the price tag for producing a barrel of green crude, but he described the expected cost as competitive with extracting oil from deep-water deposits and oil sands. The company already has produced green versions of jet fuel, diesel and clear, premium-grade gasoline, he said.

Today's biofuels -- in the United States, that's biodiesel and corn-based ethanol -- have helped displace petroleum but also have troublesome characteristics that reduce their appeal. Corn-derived ethanol and soybean-based biodiesel eat into land used to grow food, and their production and distribution consume large amounts of energy.

Many companies are making strides in producing ethanol from nonfood sources such as switch grass, plant waste or recycled paper.

Virent Energy Systems Inc., based in Madison, Wis., in March unveiled a joint venture with Shell Oil Co. that would produce "biogasoline" from plant sugars -- creating fuel that could be distributed through existing pipes and stations and used in existing vehicles.

And there are plenty of companies working toward producing oil from algae. The idea isn't new, but interest and research have grown so significantly that websites such as Oilgae.com are devoted to the topic.

"One thing that is encouraging is the level of attention and the investment that's happening to really try to find better ways to fuel our transportation system," said Don Anair, vehicles analyst for the Union of Concerned Scientists.

Anair said he was encouraged by Sapphire's reported research results. But he said he'd want to see the greenhouse gas effects of the entire process, from production to combustion, before passing judgment on Sapphire's green crude.

"Changing to this green crude could certainly have very good benefits in terms of greenhouse gas emissions, but it may not address some of the traditional tailpipe pollutants that are responsible for smog or ozone," he said.

Even if the fuel doesn't contain nitrogen, Anair added, the combustion process adds air to the mix and generally creates harmful nitrogen oxides.

That caveat was echoed at the state Air Resources Board, which is charged with guiding California's goal of reducing the carbon content of fuels and sharply cutting statewide greenhouse gas emissions.

"The emissions reductions may be coming from the refining process but we would still have emissions issues in and from the vehicle," air board spokesman Dimitri Stanich said after reviewing Sapphire's news release. "We wish them luck and look forward to their technical studies that demonstrate the cost and feasibility of their production processes."

The emissions from Sapphire's fuels are being tested by an outside company. Pyle said that because the fuels don't contain sulfurs or nitrogen, "our expectation is that there will not be those kinds of emissions."

The company is privately owned and backed with funding from Wellcome Trust, a British charity, and venture capital firms such as Arch Venture Partners and Venrock. Sapphire's technology was born out of collaborations with Scripps Research Institute, UC San Diego, the University of Tulsa and the Energy Department's Joint Genome Project. Pyle said the genome researchers helped the company pinpoint the kind of algae best suited to making oil.

Robert Nelsen, managing partner at Arch, could barely contain his enthusiasm for the venture.

"We want to displace the existing petroleum system with a continuous production system that is essentially an oil field on top of the ground that produces oil on a continuous basis for as long as you want it to," he said.

"You wake up in the middle of the night thinking about the implications of this."